Am I Rich? (Wealth Percentiles Explained Simply)

What you'll learn:

➤ Am I Rich?

Am I rich, you wonder? You’re not alone. Many people ponder this question silently. So, what’s the magic number that qualifies as rich, and how do US wealth percentiles come into play?

Schwab’s 2023 Modern Wealth Survey reveals that the average net worth needed to be considered wealthy is around $2.2 million. Your net worth is calculated by subtracting your liabilities from your assets.

➤ Wealth Percentiles

To gauge where you stand, take a look at this wealth report card, complete with a US wealth percentiles calculator:

The top 1% of net worth in the U.S. had about $10,815,000 in net worth.
The top 2% held a net worth of $2,472,000.
The top 5% possessed $1,030,000.
The top 10% boasted $854,900.
The top 50% had an average net worth of $522,210.

For reference, the most recent Federal Reserve Board Survey of Consumer Finances, updated in late 2023, reported that the median net worth of all families in 2019 was $121,700. The average net worth was $748,800.

➤ Net Worth by Age

Here’s the average net worth by age in 2019, based on the same survey:

Younger than 35: $76,300
Ages 35-44: $436,200
Ages 45-54: $833,200
Ages 55-64: $1,175,900
Ages 65-74: $1,217,700
Ages 75 or older: $977,600

If you want to determine your net worth, Nerd Wallet’s net worth calculator can help. Let’s simplify the numbers and explore where you might fall in the wealth spectrum!

➤ Is the American Dream Still Alive?

What does it mean to be “rich” these days? The traditional concept of wealth is undergoing a transformation.

“The American dream” is deeply ingrained in the national psyche, defined as a path to a happy life achievable through hard work and success.

We’ve all daydreamed about never having to worry about prices or bills, picking a dream car without glancing at the cost, or even winning the lottery and sharing the wealth with loved ones.

But what’s the true essence of this fantasy?

For many, it signifies freedom—freedom from financial worries, the ability to spend without guilt, and the desire to share that freedom with others. It’s not about amassing Jeff Bezos-like riches; it’s about being “not-having-to-worry wealthy.”

➤ Are Rich Evil?

A word of caution, though: wealth is sometimes associated with greed or selfishness. Can you be wealthy and a good person? Opinions vary, with 44% saying “yes” and 32% saying “no” in a dnyuz.com Instagram poll.

We all know that a person’s character isn’t solely determined by their net worth, but it’s intriguing that people question something they may secretly covet.

Here’s a curious fact about wealthy individuals: the richest 1% of the world’s population is responsible for over double the carbon emissions of the poorest.

This may seem logical as they frequently use private jets, while many of the less fortunate don’t even have access to electricity. This places the greatest burden on the poor, accelerating climate change and exacerbating their hardships.

➤ Is the American Dream Available to All?

Unfortunately, the American dream remains elusive for many. Housing equity constitutes about two-thirds of all wealth, but discrimination and segregation persist, impacting health, wealth accumulation, and the environment.

A 2019 survey by the Board of Governors of the Federal Reserve System highlighted the glaring disparities in achieving the American Dream. White families had a median wealth of $188,200, while Black families held less than 15% of that amount, with just $24,100.

Hispanic families’ median wealth stood at $36,100. While wealth among these underserved families is slowly growing, the figures remain distressing.

Data from the Survey of Consumer Finances and the U.S. Department of the Treasury reveal that racial disparities hinder people of color from building wealth.

As recently as 2016, nearly 20% of Black families had zero or negative net worth, compared to 9% of white families. Moreover, Black college-goers faced student loan debts 30% higher than their white counterparts.

➤ Gen Z Redefines the American Dream

Generation Z is at the forefront of redefining the American Dream. While they still value hard work, their vision encompasses freedom to choose their path, financial well-being, family, a fulfilling career, and housing. They also hold work-life balance in high regard.

The younger generation, unlike the Baby Boomers, is willing to leave jobs in pursuit of freedom and fulfilling work. However, things are shifting. As the pandemic receded, the economy surged, and employers clamored for workers.

This economic resurgence led to inflation, forcing the Federal Reserve to raise interest rates to control growth. The consequences are being felt across various sectors, with layoffs occurring, even in major tech companies like Amazon, Meta, and Twitter.

The ultimate verdict on whether the newfound desire for workplace freedom will outweigh the need to put food on the table remains uncertain. While many are hopeful, it’s a delicate balance.

➤ Matching Values with Finances

Schwab’s 2022 Modern Wealth Survey reveals that over 82% of Americans believe their personal values influence their financial decisions. T

hey consider both price and products when managing their finances, with 79% actively trying to support brands aligned with their beliefs. Furthermore, 73% feel their values guide their investment choices.

Yet, there’s a touch of skepticism when it comes to surveys. Who openly admits that their life goal is to become wealthy? It may sound superficial.

While many say they care about the environment and the well-being of all living beings, the question is whether they’ll truly invest their money in alignment with these values.

➤ How Do You Measure a Fulfilling Life?

It’s about never worrying about hunger, having a safe place to live, and having the capacity to help those in need. While this might seem idealistic, it frees you from the constant comparison with others and the fear of falling short.

Remember, wealth isn’t just about money; it’s also a matter of perspective.

Reflecting on riches can get quite philosophical. When you look up, you’ll always find people with more, and when you look down, you’ll always find people with less. Be grateful for what you have and extend a hand to those less fortunate.

Even David Rockefeller, the former CEO of Chase Bank once explained that it’s not about the money; it’s about the legacy you leave behind, as you’ll never see a hearse with a luggage rack.

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So, Are You Rich? (Let’s Find Out)